Canadian beef follows tricky paths to international markets

Canadian Prime Minister Justin Trudeau and Mexican President Enrique Pena Nieto on Parliament Hill in Ottawa on June 28. (PMO photo by Adam Scotti)

CNS Canada — Canadian beef continues to find its way to markets around the world, but while a new deal with Mexico has brought smiles to the cattle industry, questions remain surrounding Canada’s proposed trade deal with the European Union.

Britain’s recent referendum to exit the European Union has thrown into question whether the Comprehensive Economic and Trade Agreement (CETA) between Canada and the EU can be ratified.

“We see the potential overall value of the agreement at about $600 million a year in the beef sector,” said John Masswohl, director of government and international relations with the Canadian Cattlemen’s Association.

Even if Britain leaves the EU, he said, that would only reduce the deal’s value by under 10 per cent, so CETA is an agreement worth saving.

He is optimistic Britain will reconsider its decision, though, and believes it could well wind up in another vote.

On a more positive note, Mexico has agreed to fully reopen its market to Canadian beef, no matter the age. Mexico closed its ports to Canadian beef imports in 2003 during Canada’s BSE crisis, reopening months later to beef from cattle under 30 months of age later that year.

Mexican President Enrique Pena Nieto’s visit to Ottawa this week appears to have changed the picture, with Mexico agreeing to allow all Canadian beef starting Oct. 1.

“It’s sure something we’ve been working on for a long time,” said Masswohl, adding that before the BSE crisis, Canada did $270 million to $290 million in beef sales per year to Mexico.

While that number may seem significant, it’s the potential sales that now interest another market expert.

“There’s 44 million Mexicans in the middle class and they eat a lot of hamburger,” said Herb Lock of Farm$ense Marketing in Edmonton.

Both men point out Mexico also finds uses for other parts of the animal not traditionally found in Canadian food, including beef lips and the hide.

“So we think we’ll see growth in the herd again, and when we get back to more normal production levels, then we’ll have lots of products to export,” said Masswohl.

Mexico’s decision is also a message to any other country with barriers against Canadian beef still in place, Lock said. “It says to other countries, ‘So why do you have your restrictions in place?'”

It will also encourage growth in the Canadian beef sector, Masswohl said. “That is going to create confidence among cattle producers to increase their herd.”

— Dave Sims writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting. Follow CNS Canada at @CNSCanada on Twitter.

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